2014 Multifamily Forecast Report
The 2014 USC Casden Multifamily Forecast reports that rents continue to rise throughout the region as the demand for rental housing outpaces the completion of new units.
During the one-year period that ended in June, apartment vacancies declined in all four Southern California markets analyzed. San Diego County had the lowest vacancy rate at 3.2 percent (a 2.8 percent decrease), followed by Los Angeles at 3.3 percent (a 10.8 percent decrease), Orange County at 3.6 percent (a 14 percent decrease), and the Inland Empire, where vacancies plummeted 30 percent to 3.8 percent.
While the forecast projects relatively flat vacancy rates over the next two years – a slight decrease in Los Angeles and Orange counties countered by a modest increase in San Diego County and the Inland Empire – renters will pay more for housing.
The average rent in all four regions is projected to increase every quarter for the next two years:
LOS ANGELES COUNTY
Average rent in Los Angeles County is projected to increase 8.2 percent by June 2016. Vacancy rates are expected to decrease 6 percent by June 2015 and another 6.8 percent by June 2016. The Santa Monica/Marina del Rey submarket currently pays the county’s highest rent at $2,618. At $829, Antelope Valley has the lowest average rent.
Orange County rents are expected to increase 8.6 percent by June 2016. Unless there is a significant increase in new units, the vacancy rate will decrease by 56 basis points, or 15.5 percent during the same period. Currently, Newport Beach’s average rent of $2,223 is the highest in Orange County, while Anaheim’s $1,300 average rent is the lowest.
Average rent in the Inland Empire is forecasted to increase 9.9 percent by June 2016. The vacancy rate, which will be up and down through June 2016, is expected to be relatively unchanged by the end of the same period of time. This year, renters in the Rancho Cucamonga/Upland submarket paid the highest rent at $1.384, while Victorville/Outer San Bernardino renters paid the lowest at $797.
SAN DIEGO COUNTY
Rents in San Diego County are projected to increase 6.9 percent by June 2016. The countywide vacancy rate will be up and down during that period, but end up 2.9 percent above the current vacancy rates. In 2014, the Carlsbad/Encinitas/Del Mar submarket pays the highest rent at $1,843 while the Escondido submarket pays the lowest at $1,119.